Daily Archives: April 16, 2013

Bolivia to continue to experience growth inertia

Carlos Schlink writes in El Deber:

The inertia of the growth will continue

Carlos SchlinkThe Bolivian economy has had positive and negative developments. Until end of year [2013] projections are that it will continue the inertia of the growth, but softer. It is projected that the GDP won’t grow beyond 4.5 percent because regulations that want to approve do not accompany a real adjustment of the Bolivian economy, the law of the financial system will lower profits and the channeling of resources towards productive investment, since the State is trying to channel resources towards others of low profitability and social housing sectors and without real guarantees; with the investment law, while international arbitration does not exist in law and the guarantee of compensation for investments, resources to strategic sectors such as oil, energy, minerals, etc., these sectors will not develop. On the hydrocarbon law, one of the main observations has to do with a reduction of tax burdens, as well as the demands of compensation to indigenous Peoples where hydrocarbons are extracted, and the law of the mining sector, where the tax burden that it is trying to impose is almost 80% of the profits that can be generated.

Finally, the WTO provides less economic growth worldwide, product of the European crisis, which will affect in some way to the Bolivian economy; however, major food and oil prices are expected to continue high, so the impact will be minor.